PRECIOUS-Gold falls as hopes of U.S. tax reform boost riskier assets

* U.S. Senate vote clears hurdle for Trump tax cuts

* Dollar, U.S. bond yields rise

* Gold down 1.8 pct this week

(Updates throughout, adds London dateline) LONDON, Oct 20 (Reuters) - Gold prices fell on Friday after the U.S. Senate approved a budget blueprint that paves the way for tax cuts, causing European stocks, the dollar and bond yields to rise as investors betting on faster economic growth bought riskier assets. The Republican-controlled Senate voted by 51-to-49 late on Thursday for the measure, which clears a hurdle to President Donald Trump's plans to reduce taxes by up to $6 trillion.

Higher bond yields increase pressure on bullion because gold does not offer a yield, while a stronger dollar makes it more expensive for holders of other currencies. Investors may also see tax cuts as a cause for higher U.S. interest rates, said INTL FCStone analyst Edward Meir. Higher rates would push up bond yields and the dollar.

Spot gold was down 0.7 percent at $1,279.91 an ounce

at 1033 GMT, taking losses this week to 1.8 percent.

U.S. gold futures for December delivery were 0.6

percent lower at $1,282.40 an ounce. "We seem to once again be ready to test technical support around $1,275-$1,270," said Mitsubishi analyst Jonathan Butler. "If we look at the chart, it's a classic head and shoulders pattern here and the danger is we'll break lower to a level at $1,250 or even below." Analysts at Commerzbank said gold's failure to remain above $1,300 could prompt speculative investors betting on higher prices to exit their positions, pushing prices lower. The net long position of money managers in Comex gold has fallen from a peak in early September but is still at an elevated level. Meanwhile, Trump could announce his choice for the next chair of the U.S. Federal Reserve as early as next week after he interviewed five candidates including current chief Janet Yellen. A report on Thursday suggested Trump was leaning towards Fed Governor Jerome Powell, perceived as a less hawkish candidate.

The European Central Bank is expected to say on Oct. 26 it will start trimming its monthly asset purchases to 40 billion euros from 60 billion euros in January, a Reuters poll showed.

In other precious metals, silver was down 0.9 percent

at $17.05 an ounce, taking its fall this week to 1.6 percent.

Platinum was 0.5 percent lower at $916.99 an ounce and palladium was up 1 percent at $967.70. Both metals

were down on the week.

(Additional reporting by Apeksha Nair in Bengaluru, editing by David Evans)